July 16, 2007

 

CBOT Corn Outlook on Monday: Down 14-16 cents on near-term weather outlook

 

 

Chicago Board of Trade corn futures are expected to begin day session trading 14-to-16 cents lower Monday as near-term weather forecasts predict rain and cooler temperatures across much of the U.S. Midwest this week, analysts said.

 

In overnight electronic trading September corn tumbled 16 1/4 cents to US$3.38 1/4 per bushel, and December fell 17 cents to US$3.51 1/2. E-CBOT volume in December was 18,254 contracts.

 

The overnight weather forecasts expect more rain than previously predicted with temperatures expected to be well below the triple-digits predicted last week in some areas of the U.S. Midwest, an analyst said.

 

The forecast, if realized will go a long way towards alleviating dryness in parts of the western U.S. Midwest and help the crop progress through pollination, the analyst said. The U.S. Midwest may see more shower activity the first part of this week, especially for eastern areas and less hot weather at the end of this week, DTN Meteorologix Weather said.

 

In the western U.S. Midwest there is a chance for scattered showers and possible thunderstorms in the north and east Tuesday with a chance for a few thundershowers on Wednesday, DTN Meteorologix Weather said. Rainfall amounts in this period should average 0.10-0.75 inch and locally heavier with the heaviest of this activity in southern Minnesota and eastern Iowa. Temperatures are expected to average above normal with highs in the upper 80's Fahrenheit to lower 90's.

 

In the eastern U.S. Midwest, episodes of scattered showers and thunderstorms in northern areas Monday through Wednesday, Meteorologix Weather said. Rainfall amounts of 0.30-1.50 inches are expected along a line north of Moline through Dayton. Temperatures should be near-to-below normal north and near-to-above normal south.

 

In the six-to-10 day outlook, temperatures are expected to average near-to-above normal and rainfall is predicted near-to-below normal.

 

On daily technical charts, December corn hit a fresh three-week high Friday on a bullish weather forecast. Bulls have regained some upside technical momentum but it appears weather forecasters have included more rain chances for the U.S. Corn Belt this week, a technical analyst said.

 

The bulls' next upside price objective remains closing prices above solid resistance at US$3.75 per bushel, with the bears' downside price objective closing prices below US$3.56.

 

First resistance is seen at US$3.71, and then at US$3.75. First support is seen at US$3.65, and then at US$3.60 1/2. Large commercial traders reduced their long CBOT corn futures and options on futures positions by 15,280 contracts while trimming 1,753 contracts from their short positions and are now net short 395,087 contracts, the Commodity Futures Trading Commission reported Friday.

 

Large speculative traders increased their long holdings by 7,560 contracts and their short positions by 1,005 contracts and are now net long net long 119,043 contracts. Large index funds increased their long positions by 364 contracts while reducing their short positions by 643 contracts and are now net long 361,530 contracts, the CFTC said.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled lower with the benchmark January contract down RMB/13 at RMB1,490 per metric tonne.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EDT and the weekly crop progress report at 4:00 p.m. EDT, (2000 GMT).